Since we are focusing on the affordability of a house, why not actually use the economic tools out there?

First of all, can you afford a 400K house given your salary?
Use this tool:
http://www.zillow.com/mortgage-calculator/house-affordability/
This tool says if you have a saving of over 20K, then you can afford a house worth 333k.

Another tool:
http://www.realtor.com/home-finance/financial-calculators/home-affordability-calculator.aspx

Surprisingly this one gives a lower budget to you, somewhere around $240k depending upon your saving and debt payments.

Finally this one:
http:///calc-howmuch.html
This one says around $300K

All of these assume a downpayment of $20k. Regardless of assumptions used, it seems you shouldn't go above $330K for a house.


I know finding a house in a decent DMV neighborhood below 400K is impossible. You might consider going farther away from the metro region, settling on an up-and-coming neighborhood whose price hasn't ballooned yet or settling on a very small condo.

Tool below shows whether it is better to rent or own:
http://www.nytimes.com/interactive/business/buy-rent-calculator.html